Get a free, no obligation personal loan quote with rates as low as 6.99%
Get Started You can apply with no effect to your credit score

Written by: PolicyMe

Just as it’s hard to identify the right time to have kids, it can be tricky to figure out the right time to buy life insurance. This is particularly true when purchasing life insurance competes with other financial priorities, like paying off existing debt or saving for retirement. (If you know where we can find a crystal ball, let us know!)

So let’s talk about the reasons to wait to buy life insurance (and some reasons not to).

Waiting To Buy Life Insurance Is Okay – In Some Circumstances

Sometimes, the burden of the debt is, well, yours. You went to university, you racked up student loans, and now you have to make your payments every month. Money is never free, after all.

But if you die, who’s in charge of that debt?

Well, as long as you don’t have a cosigner on your loan, mortgage, or credit card account, the debt goes away if something happens to you. Yes, you read that correctly—it really will disappear just like that.

However, if the debt is “joint,” the survivor (usually your parents or your partner) will have to pay the balance of the account. This is common with mortgages or joint credit card accounts.

Why Not Wait – Life Insurance Is A Different Kind Of Purchase

Having debt is one of the main reasons Canadians should have life insurance.

The reality is that life insurance is even more important to have while you have that debt. As a result, you shouldn’t put off buying life insurance until you pay off your debt.

An Essential Purpose Of Life Insurance Is To Protect Your Loved Ones From Your Debt

Your debt may seem like a heavy burden on your family today. But imagine if there was suddenly one less person in the picture to help carry that burden.

If your income is supporting your family, think about what your family’s financial situation would be if your income disappeared.  If you have debt, holding off on buying life insurance makes that debt even more dangerous to your family than it is now. For this reason, one of the main reasons to buy life insurance is because you have debt.

Insurance Doesn’t Need To Be As Expensive As You Might Think

It may seem like a cruel joke that you have to spend money to protect your family against your debt. But the truth is that life insurance doesn’t cost as much as you may think. It’s well known that most Canadians believe that life insurance costs 4x more than it does. For example, a 20-year, $500,000 term life policy costs around only $35/month for a healthy 30-year-old male. For most people, that can be enough to cover your debt. Go ahead and breathe that sigh of relief!

How Can You Save On Life Insurance?  Here Are Some Tips:

1. Buy term insuranceAs you get older, your family’s future expenses typically decrease. For example, your mortgage gets paid off (finally!), and your kids become independent. (Yes, it really will happen one day.) As these expenses drop, your life insurance needs begin to decrease too. This usually occurs around retirement. That’s why temporary (term) life insurance is almost always the best option for families looking for affordable protection.

2. Get the right amount of coverage – Get the right advice to make sure you aren’t overprotecting yourself and your family. Consider how your family depends on you financially and how they would adjust if you died. Better yet, complete PolicyMe’s free life insurance checkup to figure out how much coverage you need without overprotecting yourself.

3. Compare quotes – You don’t want to overpay for your policy, and comparing plans can ensure that you’re getting the best deal. Use PolicyMe to get quotes for the Canadian insurers you know and trust.

Now that you know more about life insurance let’s get you protected!

Caitlin Wood, BA avatar on Loans Canada
Caitlin Wood, BA

Caitlin Wood is the Editor-in-Chief at Loans Canada and specializes in personal finance. She is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over eight years. Caitlin has covered various subjects such as debt, credit, and loans. Her work has been published on Zoocasa, GoDaddy, and deBanked. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security.

More From This Author

Special Offers

More From Our Experts
Loans Canada places No. 228 on The Globe and Mail’s fifth-annual ranking of Canada’s Top Growing Companies.

By Caitlin Wood, BA
Published on September 29, 2023

Loans Canada is excited to announce it has made it onto the Globe and Mail’s Top Growing Companies list for the second year in a row.
Finder Awards Finalists: Personal Loans Customer Satisfaction Awards 2023

By Priyanka Correia, BComm

Loans Canada is happy to announce it received the finalist award in the Best Personal Loan Search Platform category.
Beware of Fraudulent Lenders Impersonating Loans Canada

By Caitlin Wood, BA

A note to our clients about fraudulent lending practices and illegal upfront fees.
Best Online Savings Account In Canada 2024

By Trevor O'Hagan

Discover the best online savings account in Canada for 2024. Compare top rates, fees, and features to maximize your savings and reach your financial g...
Best TFSA Accounts In Canada 2024

By Lucas Elliott

Explore top TFSA accounts in Canada for 2024. Compare high-interest savings, GICs & investment options for tax-free savings.
Can You Defer Your Mortgage Payment?

By Bryan Daly

A mortgage deferral is a great short-term solution to financial hiccups. Find out everything you need to get a mortgage deferral.
Applying For a Mortgage Outside of Your Home Country

By Lisa Rennie

Purchasing property in a foreigh country is a great way to diversify your assets and allow you to earn rental income.
Affordable Housing Crisis In Canada

By Lisa Rennie

Check out what's affecting the housing market in Canada and learn about the affordable housing crisis in Canada.

Recognized As One Of Canada's Top Growing Companies

Loans Canada, the country's original loan comparison platform, is proud to be recognized as one of Canada's fastest growing companies by The Globe and Mail!

Read More

Why choose Loans Canada?

Apply Once &
Get Multiple Offers
Save Time
And Money
Get Your Free
Credit Score
Expert Tips
And Advice

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.

Koho Prepaid Credit Card